Uncle Sam, states go after tax cheats

By Associated Press
Published September 17, 2003

WASHINGTON - The Internal Revenue Service announced Tuesday a new partnership with state tax administrators aimed at cracking down on tax evasion.

Under agreements with 40 states, including Florida, and the District of Columbia, the IRS will share information about abusive tax avoidance transactions and taxpayers who use them. The IRS expects more states to join the partnership shortly.

Corporations and high-income people will be the first targets, along with those who promote the schemes.

"We're closing in on you from all sides," IRS Commissioner Mark Everson said. "The states and the federal government are now fighting as allies."

The arrangement comes as cash-strapped states examine their budgets and look for new sources of revenue. State tax administrators estimate they will recoup about 20 cents for every dollar the IRS collects. IRS officials said billions in taxes might be going uncollected because of scams.

Under the agreement, the federal and state governments will share information when an evasion is detected or identified. Tax officials currently wait until they finish an audit before sharing information about tax evasion.